Deciphering Capital is a scholarly contribution to the renewed discussion of Marxist political economy stimulated by today’s capitalist crisis.

As its author Alex Callinicos makes clear, Marx’s basic theory of crisis was of competitive overproduction in relation to the limits of the market —  “the restricted consumption of the masses” —  but this was by no means a terminal failure. 

The capitalist system could resume its development after the crisis, with the tendency of the rate of profit to fall, swings in financial markets and the cycle of boom and bust offset by  factors such as reductions in wages below their value, fluctuations in the size of the industrial reserve army and cheapening of imports.   

Marx also had a global perspective. The risings on the European continent in 1848, triggered by an economic crisis that started in Britain a year earlier, failed ultimately because of economic recovery brought about by imperial expansion into China and gold discoveries in Australia and California. 

Marx valued working-class struggles for their part in “holding up the spirit” of those involved and preparing them for self-emancipation.  There was no automatic mechanism to ensure that crises precipitated revolution. 

Nevertheless, Marx was emphatic that the working class must seize the opportunity for revolution presented by the bursting of the bubble in the financial markets and the fall in the return on capital.  

Callinicos discusses other issues in considerable detail, including Marx’s dialectical method derived from Hegel, the theory of value and surplus value that superseded Ricardo’s labour theory of value and the relationship between value and prices.   

He certainly draws his readers more deeply into Marxist theory and makes some headway in an over-brief analysis of capitalist crisis today.   

Callinicos compares post-war Keynesianism, with controls over financial markets and international mobility of capital, with the neoliberal policies that have been applied since the 1980s in deregulating financial markets.  

The cycle of financial recklessness and panic studied by Marx has come to rule the world economy, with the result seen in the 2007-8 crash. Then, growth in the advanced economies came to depend on financial bubbles, notably in housing.    

From the evidence of the great crash, Callinicos is certain that neoliberal policies of deregulation of capitalism will not succeed in setting the system on a new growth path. 

This statement needs to be enlarged in relation to the increasing intensity of global competition and the weakening of imperialism’s world hegemony.  

The author is less sure about the possibilities of working-class collective action which, he asserts, has been “pulverised” in recent years. Callinicos believes it might be expressed on the streets rather than in more traditional forms of organisation.  

A measured rejoinder is that it is too early to say.

Bookmarks Publications, £14.99